Lee Hsien Loong
Singapore
“Yes, of course, every time I sell the land, I put money into the Reserves, but I am not putting the money into the Reserves all today. I am putting it in a stream of payments, 30 years apart.”
“Speaker, Sir, I do not think it was a very difficult question to figure out, that when I spoke to MTI, I spoke to the Minister, because Mr Gan Kim Yong is the Minister for Trade and Industry.”
“" I think that would have been unjust because he has not been charged. If there is a case, the case has not been heard, he has not been found guilty or acquitted or whatever. I cannot prejudge a case based on an incomplete investigation – started recently, or a partial investigation, just entered into the formal phase.”
“Mr Speaker, Sir, first, Mr Leong is quibbling over words. In February, Mr Tan Chuan-Jin told me, "I offer to resign". I said, "Yes, sort out your constituency first". In other words, decision taken. The moment to execute it, I will decide. So, it is quite clear. Legally, he has not resigned.”
“Sorry, Mr Speaker, to respond to Ms Poa on why not no pay leave. It is my judgement to make. The Civil Service works in one way; their basis is if you have been convicted, then you are on zero pay and other consequences will follow.”
“I am very happy to note that Assoc Prof Jamus Lim appreciates the second key and is seeking a third. And I hope that it portends a change in your attitude towards the Elected President and his custodial powers. But I think the Brazil example is a very interesting one.”
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“The ERS shares this time will be $900 million compared to the extra $650 million that we will collect in GST in 2004. So pressing on will make nearly all households better off in 2004. The measures I have set out will help ease the pain for Singaporeans to make the transition, lower the costs for businesses, help companies build capabilities and stimulate demand for the domestic sector. The Ministries will be providing further details of the measures under their charge over the next few weeks. The help package to Singaporeans and businesses amounts to about $1 billion. May I ask the Clerk now to distribute a list (Cols. 2847-50) summarising the measures. [Copies of list distributed to hon. Members.] This package will help Singaporeans and businesses tide over the downturn and ride the path to recovery. List - summary of measures & additional utilities save rebates Mr Speaker, Sir, if you will allow me, having laid out what we are doing formally, I would like to explain how I see the CPF issue which this House has been dealing with for many years. The latest package of CPF changes is a very difficult decision to make, but it is the right step forward. When I entered politics in 1985, my first political fight was about the CPF. It was a year of recession and the CPF rate then was 50%. We were in the old Chambers. And Dr Toh Chin Chye used to sit where Mr Seng Han Thong now is, roughly, and he made a very fierce speech, opening fire on all aspects of the Government's policies. He was far better than any Opposition MPs. The next day, I stood up and fired back. It was one of my first speeches. I was young, and I took issue with him on the CPF, amongst other things. I will read to you what I said: "What is an overhead? CPF - is that an overhead?”
“Now, with lower tax revenues, higher expenditures because of SARS, and this new help package, even if we take into account the CPF savings, we are still going to run a deficit of $2.3 billion this year. Next year, we are projecting an even larger deficit. Deferring the GST will make the deficits even worse. I understand the visceral reaction of Singaporeans to any tax increase, and especially to any GST increase. At this time, any additional burden must be unwelcome. However, we should try to understand the problem rationally. Deferring the GST increase is, in fact, the least effective way to help low income Singaporeans. If your objective is to help low income Singaporeans, then the last thing you want to do is to cut the GST or defer the increase. Why do I say that? Because, by design, the GST covers almost all types of goods and services consumed by all income groups - whether it is an airline ticket, a car, food, a haircut, or lawyer's fees - every service, every good is taxed the same rate. And most of the tax is paid by the higher income group. So, if I have a lower GST, I am giving most of my money back to the higher income group who do not need it, and only a very small proportion is going to go to the lower income group, the unemployed, or the older workers. So if you look at it rationally, it is far better to proceed with the GST increase so that the Government will have the money and the resources, and can use these resources to target the deserving groups and render the help where it is most needed. Therefore, we will proceed with the GST increase and we will give out the second tranche of ERS shares on 1st January 2004 as planned, to help the low-income families with the transition.”
“But the Panel can demand that unnecessary costs be cut, unnecessary rules be removed, unnecessary programmes be stopped, and unnecessary fees and charges be reviewed. I encourage MPs and members of the public to contribute actively to both the PEP and the Cut Waste Panel, and the more proposals we get, the more effective we can be. Goods and Services Tax The PM announced yesterday that the one percent point increase in GST scheduled to take place on 1st January 2004 will proceed as planned. Let me explain why we cannot delay this increase. The GST increase is to raise revenue to compensate for the cuts in the company and personal income tax rates. The Ministry of Finance planned the income tax cuts on the basis that GST would be raised to 5% on 1st January 2003, that means last January. The phasing in of the GST increase has already created a significant revenue shortfall. A 4% GST rate will not be enough to offset the lower income tax collections, and we need to remedy this as soon as possible. Our budget this year is very tight. We are likely to run a much bigger deficit this year than we had planned. Revenues have come down in the first half of this year because of income tax cuts, slower economic growth and SARS. Because with SARS, people stayed home, they did not spend, and revenues dropped. In the Straits Times yesterday, one letter writer asked how the Government is going to spend its savings arising from the CPF changes - already looking for hong baos. To put the numbers in perspective, the Government is saving about $175 million a year from the CPF changes. This year, in the Budget Statement, I had already projected a deficit of $1.2 billion.”
“But out of 20-30, one has a unique problem and is a case which you really ought to fight, and you should do something about it. Every time I do an MPS, I encounter such cases. Maybe the more difficult ones come to look for me, but you have to be alert to spot it and stick a red spot on that case and raise the matter in a non-routine way, and we can get it fixed and get the costs reduced. It is not possible to change the mindset of a big organisation like the civil service overnight. But by driving this effort right from the top, we send a signal across the service and, over time, this approach will percolate down the ranks and we will slowly, but steadily, clear the red tape away. Many MPs have called for greater economy and less waste in the civil service. Given that the Pro-Enterprise Panel has been quite successful, I have decided to set up another group, which I will call the Cut Waste Panel. We have decided to call a spade a spade, because otherwise it will lead to misunderstandings. It will include members from the private and people sectors. The Panel will be chaired by the Head of Civil Service, who also chairs the PEP. Anyone who has any suggestion of where the Government can cut waste or remove frills is welcome to put the idea to the Cut Waste Panel. By cutting waste, the civil service will reduce its cost of operations, and the lower the cost of operations, the lower the fees can be. The Cut Waste Panel cannot cut everything to bare bones, least of all cut off limbs. There was recently one newspaper columnist who outdid himself by suggesting that we should just reduce the size of the civil service by 30%, and therefore no longer need to reduce the CPF rate. This was a particularly absurd proposal, even by quite high standards.”
“Members want civil servants to exercise discretion in their constituents' favour, but they also want the rules to be transparent. It is hard to have both. I have had constituents come to me, and I am sure many Members have too, and asked for special favours. I said, "It cannot be done. This is against the rule." They said, "gao tai qui shou" - All you have to do is to raise your hand. I said, "If I do it for you, I will have to do it for everybody else." They said, "Just do it for me. Do not tell anybody." So that is why we have transparency. I am not suggesting that it is good for our civil servants to be rigid bureaucrats. We have to make a bigger effort to operate more flexibly and cut red tape. We need to increase convenience and reduce costs to businesses and to the general public. We have had some successes, eg, 57 (33%) of all the 173 statutory declaration requirements by the Government will be removed by the end of this financial year. We have 173 different types of statutory declarations and we are going to chop off one-third of them, and I am sure there will be more to go the next time we look at the list. There is a Pro-Enterprise Panel (PEP) whose task is to follow up on suggestions and complaints from businesses to change or remove rules. Out of a total of 1,011 suggestions received thus far, nearly half (46%) have been accepted. So we are quietly making progress, even though perhaps not quickly enough for MPs. But I encourage MPs to write in with their cases and to take good cases up with the Ministers, with me, or the Prime Minister. There are many cases which are routine. MPs can handle 30-40 cases in one long evening. You may have seen all these problems before.”
“Most of the projects are small, and so are likely to benefit local contractors and create spin-offs for their suppliers. Mr Mah Bow Tan will elaborate on the measures for the construction industry later. Government's cost-cutting initiatives Many MPs have asked the Government to do its part to cut fees and charges, and not to rely solely on wage and CPF cuts to reduce the cost of business. This is a legitimate request. The public sector is always looking for ways to cut costs, espe- cially the Ministry of Finance. My Ministry has launched a civil service-wide Economy Drive, to review all our discretionary expenditure. Everything from development projects to expenditure on manpower to day-to-day expenses is placed under scrutiny. We are not yet wielding the axe but, we have already taken out the microscope. The idea is not so much to cut overall Government expenditure, but to effect savings which can be redirected to new initiatives and higher priority areas. One measure which we should be finalising in the next two months is the review of civil service salaries for new recruits and in-service officers to bring them more in line with the private sector. Miss Indranee Rajah and Mrs Fang Ai Lian have called for a pro-business civil service, one that operates with more `common sense'. May I assure all Members, and the two ladies in particular, that common sense is not so uncommon in the civil service. There is a reason why many civil servants enforce rules so strictly. It is because, at the operational level, flexibility to exercise discretion can tempt officers to offer favours. So strict and transparent rules are by design a trademark of our honest and clean Government. You say what you are going to do, you publish it, and you do according to that.”
“They said, "You are taking $25 per month from me in order to measure me and punish me." We thought that they did have a point and so reviewed the fee. So we will change the rate and we also changed the basis of charging. We will charge based on turnover, rather than size of the taxi fleet. Acceleration of infrastructure projects The next programme that we will be proceeding with is acceleration of our infrastructure projects. The last few years have been especially wrenching for the construction industry. It has experienced nine consecutive quarters of decline. In 1997, total contracts awarded were worth $24 billion. By 2002, it had dropped to $14 billion, nearly half. This adjustment was inevitable because the construction industry had to resize and consolidate after the excesses of the property boom in the 1990s. The Government has not tried to boost the construction sector with massive public works programmes. It is not realistic to try to sustain the old levels of activity. Also pump-priming will not work in our small and open economy. However, it is worthwhile to bring forward infrastructure projects that we intend to undertake anyway within the few years, provided we can afford it. This will not only help to create some jobs, but will also let us take advantage of the current low prices to get better value for our money. Government agencies have identified more than 60 public sector infrastructure projects that can be advanced. In total, contracts amounting to more than $600 million will be brought forward and awarded in this financial year and the next financial year. These are projects worthy in themselves, such as development and improvement works for roads, schools, community clubs, parks, and drainage and sewerage systems.”
“Diesel tax rebate for taxis Diesel tax is imposed on taxis to close the gap between the fuel cost of diesel-powered taxis and petrol-powered private cars. As part of the off-budget package in 2001, I reduced the diesel tax for taxis from $5,100 to $4,700. In the Budget Statement this year, I extended the reduction by six months, till the end of 2003. I will now extend this reduction by another six months, till 30th June 2004. This will cost the Government about $4 million. There is also a $2,000 diesel tax rebate which was granted as part of the SARS relief package, but this will not be extended beyond 31st December 2003, because the earnings of taxi drivers are now practically back to pre-SARS levels. Taxi operator licence fee As part of the SARS relief package, the taxi operator licence fee of $25 per taxi per month was waived till 31st December 2003. LTA has since reviewed the regulatory requirements. To reduce the burden on taxi companies to the lowest possible level, LTA will absorb most of its regulatory costs rather than pass them on to taxi companies. Nevertheless, it still needs to charge taxi companies a small licence fee. The revised fee will be 0.1% of the taxi company's annual revenue from taxi operations. This works out to only about $2.80 per taxi per month, a small fraction of the original $25 fee. The revised licence fee will take effect from January 2004. This is just a small example of how we are keeping Government rates and fees as low as possible. It is also as an example of how we are sensitive to feedback. Before we announced the SARS package and suspended this fee, we held a dialogue with the taxi drivers. I think it was Khaw Boon Wan who did it and the taxi drivers gave him a real earful on this issue.”
“Another $50 million will be used to develop four key tourism segments: leisure travel, business travel and MICE (meetings, incentives, conventions and exhibitions), healthcare and education services. Rebates for non-gazetted hotels As part of the SARS relief package, we provided a higher additional property tax rebate of $2,000 plus 30% of the balance of property tax payable in 2003 for gazetted tourist hotels. We did not extend it to non-gazetted hotels because they do not take so many tourists, and we thought they will be okay since it is Singaporeans who visit the non-gazetted hotels. But Singaporeans also did not visit the non-gazetted hotels. So, we will extend the rebate on television licence fees and property tax rebates to the non-gazetted hotels as well. These two extensions will be back-dated and will save the non-gazetted hotels $1 million. Statutory life spans of omnibuses and taxis Bus and taxi companies were also badly hit by the SARS crisis. One practical way to help them is to extend the life of their fleets and to ease their depreciation costs. The current statutory life span for omnibuses is 15 years, and 7 years for taxis. With advances in vehicle engineering, stricter inspections and better maintenance, these vehicles can stay roadworthy longer. We will therefore extend the statutory life spans of omnibuses from 15 to 17 years, and for taxis from 7 to 8 years, with effect from 1st September 2003. This will apply to both existing and new omnibuses and taxis. Bus and taxi companies are expected to save about $7 million and $10 million a year respectively in depreciation expense, at no cost to the Government.”
“It will cost the Government $8 million. Local Enterprise Finance Scheme In recent years, we have progressively enhanced the Local Enterprise Finance Scheme (LEFS) to help SMEs cope with the challenging economic conditions. The changes include increasing the default risk borne by the Government from 50% to 80% and reducing the LEFS fixed interest rates. In view of the continued economic weakness, we will extend the LEFS enhancements for another year till 30th June 2004. This will cost the Government $25 million. Bridging Loan Programme for all SMEs During the SARS outbreak, we introduced a Bridging Loan Programme under LEFS for tourism-related SMEs. Under this scheme, each SME in the tourism-related sectors can borrow up to S$100,000 of working capital. As other SMEs may also find this programme useful, we will now open up the Bridging Loan Programme to all SMEs, and this will cost the Government $5 million. Helping the tourism and transport sectors A second group of businesses that need help are those in the tourism and transport sectors. Tourist arrivals have rebounded strongly since the low in the second quarter of this year. By the end of August, tourist volumes should be about 85% of pre-SARS levels. But this is partly because the affected industries have cut hotel room rates and airfares significantly. Additional help from the Government will help to speed up the full recovery of the tourism and transport sectors. Tourism Recovery Fund The Government will set aside $100 million for a Tourism Recovery Fund. This includes the $50 million for the Global Recovery Programme that Singapore Tourism Board announced in June 2003 to bring tourists back to Singapore through confidence building programmes, overseas travel promotions and global advertising campaign.”
“The Trade Development Incentive Scheme has therefore been relaunched and we will make it as the International Enterprise Incentive Scheme with a budget of $90 million over three years, from FY2003 to FY2005. The new International Enterprise Incentive Scheme will help companies develop new markets, build internationalisation capabilities, and encourage Singapore companies to venture abroad as a cluster. Domestic Sector Productivity (DSP) Fund Next, we have set up a $45 million Domestic Sector Productivity Fund to help industries like retail and construction upgrade their productivity and competitiveness. These sectors lag significantly behind the developed countries in productivity. And it is one reason why they cannot pay as well and therefore are unable to attract Singaporean workers. So we will set up a Domestic Sector Productivity Fund, administered by SPRING Singapore, to co-fund industry-wide projects to catalyse improvements in business strategies, operations and practices. The aim is to encourage domestic industries to exploit economies of scale, adopt new technologies, and improve inter-organisational efficiency through standardisation. Second Tranche of Loan Insurance Scheme One of the problems that SMEs face is access to financing. Last year, we piloted the Loan Insurance Scheme (LIS) with six participating financial institutions. Under the scheme, the Government shares the cost of the insurance premium against loan default. The scheme has been well received and has helped many SMEs. To date, the scheme has helped to insure $16 million worth of loans. We will launch a second tranche of the Loan Insurance Scheme. This will involve more financial institutions and should be able to facilitate about $500 million in loans to SMEs over five years.”
“We have to proceed with the changes, but we will not forget the older workers who are hardest hit by economic restructuring and who have made a very big contribution to bringing us where we are today. So, the next time the Government implements surplus sharing schemes, we will especially remember this group of older workers, and will give them something extra. Help for businesses Next, besides helping individuals, we will also do more to help businesses. Two sectors especially need assistance: first, the small and medium local enterprises, and, secondly, the tourism and transport sectors. Assistance to local enterprises Small and medium local enterprises form a significant part of the economy. They employ more than half the workforce and make up more than 90% of the total number of enterprises. We will help them to upgrade their capabilities and cope with the current slowdown. International Enterprise Incentive Scheme Mr Heng Chee How rightly pointed out that besides cutting costs, companies must pursue the right strategies to grow their businesses and so create more jobs. If you are just a cost cutter, you are not going to grow an empire. You need to watch your costs, but you also need to grow your business and seize new opportunities. You need to move ahead and then your business will grow. So we have to see the rise of the regional economies not only as a major challenge, but also as an enormous opportunity. Our companies should respond to this opportunity by venturing abroad to ride on the growth of our neighbours, such as China and India. The Government will step up its efforts to help companies to do so.”
“This way, companies will be able to deploy workers to the job more quickly and the workers will be better-trained for the job. The Government will set aside $2 million for the scheme, which will run for one year from 1st October 2003. This will be used to absorb 80% of the training cost of the workers. As a partner in this scheme, the Singapore National Employers Federation will absorb a further 10% of the training cost for its members, so that the employer only pays 10%. We must have that small employer contribution because if the employer is not prepared to pay to train their workers, it will feel no obligation to employ the workers. And in three months the workers would have forgotten what they learnt and the training would go down the drain. So we must have that commitment from the worker and also from the employer. More for older workers Seventh, we will look after the older workers. Mr Nithiah Nandan does not like the phrase. Perhaps I should say we will look after those aged around 50-55 and thereabouts, but it will include him. The restructuring of the economy, and especially the CPF changes, will affect older workers the most. Wage restructuring often means lowering wages for older workers, who are at the top of their salary scales. They will experience the steepest CPF cuts to help them hold on to their jobs. We are cushioning the impact on them by phasing in the reduction in their CPF rates for them over two years. Nevertheless, it is still going to be difficult for these workers. And I think these are the workers who are the most concerned, because they so often have the heaviest family obligations.”
“If they fail to secure jobs within three months, then we will assign them a case manager, who will provide more intensive career counselling and help them overcome any impediments to securing a job. The financial help will last for three to six months, because within that time most recipients should be able to get back to work. Sometimes an individual may fulfil his obligations and cooperate with his case manager and try his best and yet not find a job. For such exceptional cases, the CDCs may consider extending the assistance beyond six months. We need to focus our help on those who are doing their best to help themselves, and not allow the scheme to become an automatic handout from the Government. There are some Singaporeans who are unfit to work because of illnesses or disability. The CDCs will also continue to give them assistance. If unemployment goes up over the next few months, which is possible, more unemployed workers will need help. Therefore the Government will help the CDCs to expand their Work Assistance Programme. We will allocate $40 million for this purpose. However, the most important thing is for those who find themselves out of a job not to lose heart, but to try to get back to work as quickly as possible. The longer a worker is out of work, the harder it will be to get restarted again. Training for Employment Scheme Sixth, to provide further help for unemployed Singaporeans, the Government will pilot a new Training for Employment Scheme to facilitate the employment and training of local workers. Under this scheme, the Singapore Workforce Development Agency - the new statutory board which MOM is setting up - will help companies which have 20 or more job vacancies recruit and train local workers.”
“This will provide financial assistance to unemployed Singaporeans and at the same time help them to find jobs. So there are two connected limbs - financial assistance on the one hand and help to find job on the other. The Work Assistance Programme will integrate employment assistance with the current interim assistance scheme administered by the CDCs. It will focus on low income individuals who are fit to work. The amount of assistance will vary depending on each applicant's circumstance, but generally will not exceed $400 per month. Besides cash, the family may also receive targeted support, for example, schooling assistance for children or a utilities grant. Such targeted support will address the most pressing needs of the family, and ensure that the assistance is put to good use. This is a practical problem. If you take a purist approach, when I give you help, I should give you money because it is up to you what to do with the money, and you must know what you are doing. But MPs know that in real life, that does not always work because if we give money to him, he may have a party and tomorrow, he will queue up again. It happens. You can give it to his wife or to his children, but you really do not want to get involved in his family's life. So we will give, in effect, vouchers, either for transport, school textbooks, or medical treatment, to make sure that the most urgent family needs are seen to first. In return for the assistance, beneficiaries will have to fulfil specific conditions. They must actively seek work. They must attend all job interviews arranged for them, undergo training to acquire new skills and accept any reasonable job offer.”
“I am sure unemployed workers will welcome this, but the danger of course is that even employed workers will welcome this because surely, it will encourage many more people to become unemployed to collect the $2,000! We have seen it happened repeatedly, most recently with our Economic Downturn Relief Scheme. If there is money being distributed, people will queue up for it. The Government has to take a different and more practical approach: we will go the extra mile to help you, but you have to be prepared to help yourself to get a job and improve your skills. We have been providing help through the Community Development Councils (CDCs). The CDCs provide short-term relief to individuals and families in temporary hardship, such as when their sole breadwinner is retrenched. They administer an interim financial assistance scheme which has been quite successful - it is flexible, it is targeted, it is sensitive. The CDCs can assess whether a case is deserving, whether he is helping himself, whether he bought a big screen TV to watch the World Cup, or whether he is struggling because he is out of a job and really needs to provide for his children. And the CDCs can adjust their assistance correspondingly. They have the sensitivity and flexibility to customise their assistance and personalise it and distinguish those who really need help from those who should be able to fend for themselves. In the last financial year, the CDCs together spent $3.3 million helping some 10,000 people under this scheme. Within six months, 97% of the people who were helped no longer needed assistance. To strengthen their efforts to help the unemployed, the CDCs will launch a new programme called the Work Assistance Programme (WAP).”
“Mr Nithiah Nandan argued passionately that besides feeling for older workers, the Government should take concrete actions to address their problems. This is precisely what we have been doing. The People-for-Jobs Traineeship Programme (or PJTP) gives financial support and incentives to employers, to help local workers in their 40s or older to make career transitions. Employers are expected to set up traineeship or mentorship arrangements for their new workers, besides providing suitable job opportunities to them. Currently, 5,000 companies are registered on this PJTP programme. 12,000 older workers, mostly with only secondary education or below, have been placed in jobs. 44% of them, nearly half, have stayed on with their employers, even after the salary support ended. This shows that the scheme has been effective in helping the older workers to find new jobs. In view of the success of the PJTP programme, the Government will extend the programme for another year until 31st December 2004, and will commit another $36 million to finance it. Work Assistance Programme Fifth, we will do more to help the unemployed. Unemployment numbers may go up for the next six months, even though the economy is showing signs of recovery. Beyond that, unemployment should start to come down, but with restructuring continuing, we cannot expect to go back to the 1% unemployment rate that we used to enjoy before the 1997 Asian financial crisis, at a time when our economy was growing rapidly, and restructuring was not yet a problem and, if I may add, when our workers were all much younger. Mr Ang Mong Seng suggested a $2,000 unemployment benefit.”
“I urge Members to be patient. Containing healthcare costs Third, the Ministry of Health is getting its hospitals to go all out to save money for their patients. The Cluster CEOs are personally championing this drive. There are many ways to treat the same illness. There is a range of drugs, implants, medical devices that we can use, at very different prices, often with similar clinical outcome. By standardising surgical supplies, such as gloves, we save money for hospitals and for our patients. By centralising purchases of drugs, we get bulk discounts and gain bargaining power. By coordinating better when transferring patients between hospitals and clinics, we cut out unnecessary X-rays, laboratory tests and even repeat prescriptions. If we take this economy drive seriously, at every level, there are countless ways to cut out costs without affecting clinical outcome. This is why MOH will be publishing hospital bill sizes of common illnesses so that hospitals can learn from one another on how to render good reliable medical services at the lowest possible cost. People-for-Jobs Traineeship Programme Fourth, older workers will need extra help, especially those who have lost their jobs. These workers are more likely to be retrenched, and have greater difficulty finding new jobs. We are lowering the CPF contribution rate for workers aged 50-55 to address this problem. However, despite this, older workers will leave their jobs from time to time, and will often need extra help to make the transition to another job. Older workers have found it difficult to persuade employers to hire them, especially in this current job market, and if they have no track record in a different industry.”
“Many MPs have urged the Government to do more to lessen the cost burden on Singaporeans. The Government agreed and we will do so. Utilities-Save Scheme First, we will provide more help for low-income families. We will do so by expanding the Utilities-Save scheme. We have already given Utilities-Save rebates for households in this year's Budget. The Government will now give a further once-off rebate of $200 for those living in 1- and 2-room HDB flats, $100 for those in 3-room flats, $50 for those in 4-room flats and $30 for those in 5-room flats. So Utilities-Save is weighted towards those in the smallest flats and the poorer families. The rebates for the 1-, 2- and 3-room flats will be paid in December this year and also in February next year, while the rebates for the 4- and 5-room flats will be paid in December this year. These rebates cost $54 million. Setting up public transport funds Second, public transport. Mr Yeo Guat Kwang yesterday asked if the transport operators could give vouchers to needy families to help them buy their monthly tickets. This is a practical idea, although I am not sure that the transport companies want to set up welfare departments to administer the scheme. But there are ways that it can be done. The Land Transport Authority (LTA) has been discussing with the public transport operators. SBS Transit and SMRT are working with the NTUC to set up a fund, to help the families of needy union members to top up ez-link cards or purchase season cards. The CDCs have also got together to set up a similar fund with the transport operators, so that non-union members will also be covered. This will help to keep public transport cost affordable for Singaporeans. I believe that the NTUC, the CDCs and the transport companies will announce the details soon.”
“However, as our economy restructures, some households earning more than $800 a month will have difficulty sustaining home ownership. No matter how easy we make it for households to buy flats, there will still be some at the margins who are either not ready to buy flats, and who need affordable rental housing on a temporary basis, perhaps for a year or two, until conditions have stabilised and they can commit to a flat. To help them, we will raise the household income ceiling for rental flats under the HDB's Public Rental Scheme from $800 to $1,500 per month. This will cover about one-quarter of the households. However, households earning more than $800 a month will receive a lower subsidy on their flat rentals than those earning less than $800. They will thus pay higher rents, though it will still be subsidised and very affordable. This will encourage them to purchase their own flats as soon as they are able to do so. Help for Singaporeans Next, the Government will implement measures to help Singaporeans cope with the slow economy and the CPF changes. We have done many such measures since 1998 - successive packages, successive schemes, variations, alternatives, enhancements, improvements, etc. Over six years since the Asian crisis, we have had quite a lot of experience helping people where it is most needed. Last year, we staggered the increase in the GST rate, from 3% to 5% over two years, instead of doing it in one step. But we still paid out the full amount of the first tranche of the Economic Restructuring Shares. So, we have more than offset the GST increase last January. This year's Budget also included further assistance to households to help pay utilities, service and conservancy charges and housing rentals.”
“From the perspective of people looking for housing, this will enlarge the HDB's flat rental market and offer an additional option to young couples and budding entrepreneurs, and others who are not ready or not yet willing to commit to a house purchase. Maintaining home ownership policy Let me add that encouraging home ownership remains a fundamental objective of the Government's public housing policy and a key purpose of the CPF. Home ownership promotes rootedness and a sense of belonging among Singaporeans. The HDB will price its flats such that 90% of Singaporean households can still afford at least a 3-room flat, even at the lower CPF contribution rates. If we need to adjust the prices, we will do so. We have done our sums and we know that even at the lower CPF contribution rates, at least 90% of Singaporeans can afford to buy their own 3-room flats. HDB will continue to help low-income families to buy flats under its Special Housing Assistance Programme. Extending the Public Rental Scheme Dr Warren Lee and others yesterday asked if the Government could offer other housing alternatives for Singaporeans. Minister Mah Bow Tan repeatedly counselled them to be patient. But I am sure that Dr Lee would be happy to know that HDB will relax its rules on rental flats, but within the overall framework of promoting home ownership. Currently, the household income ceiling to rent 1- and 2-room flats under the HDB's Public Rental Scheme is $800 per month. In other words, a household with a maximum income of $800 can rent a flat from HDB. Many MPs have asked for this to be raised. We have been reluctant to do so because we prefer to give more help to low-income families to buy flats and become homeowners rather than to have them become permanent tenants in rental flats.”
“A retiree should be able to use it to supplement the monthly amount from his CPF, either by downgrading to a smaller flat, or by renting it out and collecting rent, and moving in with his children or his children's in-laws or even his grandchildren. However, our rules on subletting of entire HDB flats are quite restrictive. For example, until quite recently, the owner had to be working overseas. And Members will know that many Singaporeans tried to get around this by the device of locking up one room - the body is gone, the spirit is still somewhere inside there! So, in January this year, HDB relaxed the rules to allow an owner to sublet his entire flat, provided he had not enjoyed any housing or mortgage subsidy on his flat, had lived in it for 10 years and did not have an outstanding loan from the HDB. So, it is quite a stringent rule: no housing subsidy, no mortgage subsidy, 10 years living in it, no outstanding loan. But only a handful have taken up this scheme. HDB will now relax the subletting rules further. From 1st October 2003, flat owners who have lived in their flat for at least 15 years can sublet their entire flat, regardless of whether the flat had been bought with a subsidy, and even if they still have an outstanding HDB loan. If the flat owner does not have an outstanding HDB loan, then he can sublet his entire flat after occupying it for only 10 years. With this relaxation, about 250,000 HDB flat owners will become eligible to sublet their flats. This will provide them with a source of income for old age.”
“I do not expect many to need bridging loans. The last time we did this, when we cut the CPF in 1999, only 125 people signed up in the whole of Singapore, and they only needed to borrow a total of $227,000. And so far, 45 have already paid back fully. So while the scheme is available, it is really a final and last resort, in case all the other arrangements are not sufficient. I am also glad to read in the papers today that the commercial banks are also exercising flexibility to restructure their mortgage loans to help borrowers cope. All these measures will ensure that very few homeowners will experience difficulty servicing their mortgage payments as a result of the CPF changes. HDB Policy Changes Secondly, we are going to make significant HDB policy changes. A main objective of the CPF is to provide a steady and sufficient income for Singaporeans in old age. In the CPF scheme, savings for old age are intimately linked with savings for home ownership. On the one hand, an HDB flat is the most important investment and most important asset of most families. It is an investment which should help provide for the members' old age. On the other hand, the flat absorbs a large part of the members' savings, leaving many members with only enough cash in their CPF for a modest monthly sum in retirement, barely adequate for their basic needs. Even with the new Minimum Sum of $120,000, half of which can be in a housing pledge and half of which is in cash, the cash portion of $60,000 will yield a monthly payment of only $378, if the money is to last until the member is 80 years old. So, the conclusion is, we need to find better ways for Singaporeans to benefit from the value of their HDB flats. The HDB flat is not a dead asset.”
“As the Prime Minister explained yesterday, with the lower overall contribution rate, and the change in withdrawal rules at 55, we have lowered our targets for the Special Account (SA) and Medisave Account (MA) contribution rates, so that there is more left for the OA and, therefore, a smaller impact on their ability to service their mortgages. Secondly, three-quarters (76%) of CPF members who experience shortfalls borrow from HDB. All they need is for the loan to be restructured slightly, either by extending the loan period to lower their monthly mortgage payment, or by working out a ballooning scheme with HDB, if they need to. HDB will assist these mortgagors, and exercise flexibility on a case-by-case basis. In cases where homeowners are already in financial difficulties, HDB allows them to pay their arrears by instalments, or to defer payments temporarily. And the HDB has a long menu of other arrangements to help. MPs know that the HDB, if anything, is forbearing to a fault. The Minister for National Development will elaborate on these arrangements later on. Thirdly, the CPF has measures to help from its end. CPF members can use their SA to top-up the shortfall in their CPF mortgage payments, to the extent that these payments are affected by the CPF changes. In other words, if your OA is cut by 3% and therefore you do not have enough in your OA, then you can take out that 3% from your Special Account to pay your mortgage. Because you have already committed to the mortgage, I think it is unfair for us to change the rules on you midstream. The CPF will also extend bridging loans to those facing shortfalls in mortgage payments resulting from the CPF changes. If you need to tide over a certain period, we will give you a bridging loan.”
“After the CPF changes, slightly more than half will need to top up from other sources. So, there are going to be 76,000 more homeowners who need to top up. Most of them will have quite small shortfalls - less than $200 per month. It is those in the higher income group who have the larger shortfalls, because their contributions to the Ordinary Account (OA) are limited by the CPF salary ceiling. So, the lower income groups will in fact have smaller shortfalls, because the 3% of CPF will add up to a smaller absolute amount. However, a shortfall does not necessarily mean a problem. Many members with shortfalls will be able to cope, because their monthly contribution to the OA is not their only source of funding. They may top up their mortgage payments using their personal savings, from their take-home pay or by dipping into their accumulated OA balances. And that is what 218,000 CPF members now do. After the CPF cut, this number will increase to 294,000, but most of these members have sizeable balances in their CPF OA, especially the older ones. In fact, about two-thirds of these people will have OA balances which can cover their shortfalls for two years or longer. So, the first source of fall back is the OA balances which people have built up, and the older members generally have built up bigger OA balances and so can last longer. But, unavoidably, a small proportion of homeowners will not have enough in their OA and may not have enough cash incomes to make up the shortfall. So, we are taking several steps to help this minority group. Firstly, in designing the CPF changes, we have made adjustments to lessen the impact on borrowers.”
“These measures will benefit Singaporeans, especially lower income earners and the unemployed. Businesses will also gain, especially the SMEs. Let me elaborate on them, starting with mortgage payments. Help with mortgage payments I can understand that many homeowners are concerned about the impact of the CPF changes on their mortgage payments. Nobody welcomes lower CPF contributions, and some homeowners will have genuine difficulties making ends meet. Several MPs - Mr Zainul Abidin, Mr Nithiah Nandan, Mrs Lim Hwee Hua - have raised this concern. Let me assure the House that the great majority of homeowners can cope with the CPF changes, either on their own, or perhaps with a little bit of help from the Government. We have encountered and dealt with this same problem before. In 1999, when we cut the CPF by 10 percentage points, we accompanied the cut with measures to help people who would not have enough to service their mortgages. Very few people actually needed the extra help, but the schemes gave comfort and reassurance to many. This time, the problem should be smaller, as the cut is only three percentage points. Nevertheless, we will make sure that help is available to everyone who needs it. We have studied how many homeowners with mortgages will be affected. There are 577,000 CPF members who use their CPF to pay mortgages. Of these, currently 218,000 (38%) experience shortfalls, which means that their monthly CPF contributions are less than their monthly mortgage payments. So, they are paying their mortgages partly out of the CPF and partly out of cash or other sources. With the CPF changes, the number will go up to 294,000 (51%), ie, about 76,000 (13%) more. In other words, right now, about one-third of the people using CPF for mortgages from other sources.”
“Mr Speaker, Sir, the Singapore economy has still not fully recovered from the slowdown in the first half of this year. The Iraq war and the SARS outbreak have taken a significant toll on the economy. MTI now expects it to grow by between 0% and 1% for the whole of 2003. The CPF changes are an important step to make ourselves more competitive. It makes a significant difference to employers, especially those in the labour-intensive industries. In the short term, the lower CPF rate, together with wage restructuring efforts, will help to save jobs. It buys time for businesses to restructure and for Singaporeans to upgrade their capabilities to retrain and reskill. In the long term, a lower CPF rate will mean a more flexible wage system. And the changes to the withdrawal rules at 55 will make sure that Singaporeans set aside enough for their old age. However, as many MPs have pointed out, while we make these strategic changes to the economy, we should not forget the more immediate worries of Singaporeans. Some are finding it hard to service their mortgages. Low-income families are worried about making ends meet. Workers are afraid of losing their jobs, and people who have been retrenched are anxious to find new jobs. These are real worries. The CPF changes come on top of them, and will affect nearly every Singaporean. The Government will therefore implement a package of measures to preserve jobs, help individual Singaporeans and businesses, and promote new business activities. The measures fall into six categories: (1) Help with mortgage payments; (2) HDB policy changes; (3) Help for Singaporeans; (4) Help for businesses; (5) Acceleration of infrastructure projects; and (6) Government cost cutting.”
“I am not aware of any such perception. If anything, people accuse the Senior Minister of being too active rather than waiting for his retirement, and I think that is not a bad thing.”
“The Ministry of Finance is unable to estimate this figure as it would require substantial effort to verify the marital status of every employer of a foreign maid, and estimate the personal tax savings to each employer who is single. The objective of the Foreign Maid Levy relief is to encourage women to rejoin or to remain in the workforce after marriage. Since this objective is not relevant to singles, data on single men and women have never been needed or compiled. MILITARY AIRCRAFT OVER JURONG WEST 2. Mr Chiam See Tong asked the Deputy Prime Minister and Minister for Defence (a) if he is aware that military aircraft have been flying overhead in the vicinity of Jurong West at three to five minute intervals, causing great noise nuisance to the HDB residents and resulting in the difficulty in selling the HDB flats; and (b) whether he can do something to abate the noise nuisance due to military aircraft flying overhead.”
“We have said so many times, but I will underline it heavily. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Lee Hsien Loong]. Bill considered in Committee; reported without amendment; read a Third time and passed. STATUTES (MISCELLANEOUS AMENDMENTS) BILL Order for Second Reading read.”
“The review by the Company Legislation and Regulatory Framework Committee marks a significant step forward, but it is not the end. We need to regularly review our laws and regulations to ensure they remain business-friendly and keep up with the practices in the leading jurisdictions. Such reviews will require the collaboration of the private sector and the Government, and the active interest of all stakeholders. Sir, I beg to move. Question proposed.”
“Written Resolutions Currently, the shareholders of a private company can pass a resolution without having to meet face-to-face. However, the passing of the resolution requires the approval of all shareholders. This is not consistent with the approval thresholds for resolutions passed at face-to-face meetings, where ordinary resolutions and special resolutions would require 50% and 75% approval respectively. Clause 29 amends section 184 to allow private companies to pass ordinary and special resolutions with 50% and 75% approval, regardless of whether the resolutions are passed at a face-to-face meeting or via written means. The amendment will also allow written resolutions to be passed through the use of electronic communication channels, such as email. This will enable private companies to make decisions more expeditiously and conveniently. As a safeguard, a shareholder or a group of shareholders representing at least 5% of the total voting rights can require the company to hold a face-to-face meeting to discuss and vote on the resolution. This is to ensure that the company does not use written resolutions as a means to deprive dissenting shareholders of the opportunity to be heard at a face-to-face meeting. Annual General Meetings Currently, private companies are required to hold annual general meetings every year. Clause 26 amends section 175 to allow a private company to dispense with its annual general meeting if all its shareholders agree. This change is consistent with the practice in the UK. It will benefit private companies, especially those where all the shareholders are also directors. Conclusion Mr Deputy Speaker, Sir, company law reform is an on-going process.”
“The private company must still appoint a company secretary, but this person need not be a lawyer, accountant or professional company secretary. Currently, all companies in Singapore are required to appoint a professionally qualified company secretary. In contrast, in Australia, Hong Kong and UK, there is no such requirement for private companies. The requirement in Singapore was instituted in 1987 as a means to improve the quality of corporate records of Singapore companies. While the requirement is a useful safeguard for public companies, it is not necessary to impose this on private companies. Such companies can choose to have an employee or director to perform the company secretarial functions. Alternatively, they can outsource to firms which provide company secretarial support. Some company secretaries and accountants have expressed concerns that the Committee's recommendations would lead to job losses for company secretarial firms and audit firms. The Government is mindful of these concerns. However, we do not think that the demand for services provided by audit firms and company secretaries would disappear as a result of these changes. According to a survey conducted by the Association of Small and Medium Enterprises, more than 50% of the companies surveyed indicated that they would continue to engage professionally qualified company secretaries, even if the law does not require them to do so. In addition, 78% of the companies said they would continue to have their accounts audited, as their shareholders or external parties, such as banks and finance companies, would require audited accounts. Simpler Business Regulations Let me now highlight some of the amendments that will help to simplify the regulations faced by companies.”
“However, after receiving feedback from businesses and auditors, the Committee decided to adopt the approach in UK and Australia, where statutory audit is removed only for small private companies. The threshold for defining small companies will be based on turnover, which could be raised over time. After much deliberation, the Committee recommended removing the statutory audit requirement for exempt private companies with annual turnover below $5 million. The Government has accepted the Committee's recommendation, but decided to implement it in two steps, to give the business community and the audit firms some time to adjust to the new arrangement. The prescribed revenue threshold will first be set at $2.5 million when this Bill becomes law, and raised to $5 million one year later. During the public consultation, there were some concerns that the removal of statutory audit would lead to a deterioration in corporate governance standards. This should not happen. For public companies and large private companies, audit would remain a statutory requirement. For small exempt private companies, it makes sense to leave audit as a business decision. There is no public interest at stake. In addition, adequate safeguards will be put in place. For example, shareholders representing at least 5% of the company's shares can compel the company to prepare audited accounts. All companies must also maintain proper accounting records and prepare "true and fair" financial statements that comply with prescribed accounting standards. Professionally Qualified Company Secretaries Next, professionally qualified company secretaries. Another move to reduce business cost is to remove the statutory requirement for private companies to appoint professionally qualified company secretaries.”
“Reducing Business Costs To promote entrepreneurship, our company law must not impose unnecessary regulatory burden on start-ups and small private companies. Unlike public companies where there are greater public interests to protect, for private companies we need to strike a different balance, in order to maintain acceptable standards while keeping business costs low. I shall now highlight some of the Committee's recommendations that will help to reduce business costs for small and private companies in Singapore. Removing the Statutory Audit Requirement Currently, all companies in Singapore are required by law to have their accounts audited by an external auditor. Clause 35 amends section 205 to remove the statutory audit requirement for dormant companies, as statutory audit serves no public purpose and imposes unnecessary costs for such companies. A dormant company is defined in the Companies Act as a company with no significant accounting transactions during the financial year. The removal of statutory audit for dormant companies is in line with the practices in UK and Hong Kong. Clause 35 further amends section 205 to remove the statutory audit requirement for small exempt private companies. An exempt private company is a private company with not more than 20 shareholders who are all natural persons. More than 75% of companies in Singapore are exempt private companies. Most of them are owner-managed. This means that all the shareholders are also directors of the company. For such companies, audit will be left as a business decision, instead of being imposed as a legal requirement. The Committee had initially considered removing the statutory audit requirement for all exempt private companies.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, the Companies Act was last amended in July 2002. At that time, I informed the House that a private sector-led committee, called the Company Legislation and Regulatory Framework Committee, was doing a comprehensive review of our company law. The Committee was chaired by Dr Philip Pillai, Senior Partner of Shook Lin & Bok, and comprised lawyers, businessmen, academics and Government officials. After extensive deliberations, including two rounds of public consultation, the Committee submitted its final report to the Government in October 2002 with a set of 77 recommendations. All the recommendations have been accepted for implementation. These recommendations will help to simplify business regulations, create a more conducive business environment, and lower the costs of capital raising and maintenance in Singapore. They also improve Singapore's corporate governance and regulatory framework, and align our practices with the leading jurisdictions. [Mr Deputy Speaker (Mr Chew Heng Ching) in the Chair] 5.42 pm The implementation of the Committee's recommendations will require amendments to the Companies Act, the Securities and Futures Act, and the SGX listing rules. It will also require the enactment of new legislation, such as the Limited Partnerships Act and the Limited Liability Partnerships Act. The amendments to the Companies Act will be done in two phases. This Bill, which seeks to implement 20 of the Committee's recommendations, is the first phase. The other recommendations require more complex amendments to the Companies Act, and will be implemented later. Sir, I shall now highlight the main amendments proposed in the Bill.”
“But for the older people, life used to be like that, and so life goes on, even with these problems. And I think we have to have that attitude. After a while, the reality will sink in. We can deal with it. We can cope with it. We can fight SARS and we can have life going on normally, fully and we will be able to come out on top of it. So I think that is the approach that we have to take and I will ask Mr Wong Kan Seng to explain to you some of the specific things that he has been doing in his ExCo. 5.00 pm”
“We are not absolutely sure if the treatments will work except that they will help to support you through the very difficult stage of the illness. But there is a public health solution which can keep the disease down as low as possible and keep the transmission under control. We will give everybody a thermometer. I do not truly expect that 100% of Singaporeans would take their temperature every day. But if I can get 90% of Singaporeans to do that, and if a super-spreader can be detected after spreading to 2-3 people instead of 50, then we have a chance to bring the whole epidemic under control. SARS may still be in the population, but the infection level is something that we can live with. Human beings have lived with such illnesses for generations. Until this post-war generation, when there were antibiotics, people lived with it - plague, diphtheria, polio. It is quite common that you will get ill, you will die at quite young ages, 30s or 40s - it is part of life and death. After the Second World War, with antibiotics, suddenly people felt that they have conquered all diseases. They are eradicated, they are safe. If you are sick, you go to a doctor. The doctor gives you medicine. Take the injection, and you will be well. And it was good for about one generation. Then, you had antibiotic resistance. You had malaria which is resistant. Now, you have tuberculosis which is resistant. You have Methicillin Resistant Staphylococcus Aureus (MRSA), something which is terrible, if the hospital is not careful, you can get it. You have got AIDS, which is also a viral disease like this one. After 20 years, it is still around. There are treatments but no vaccine. It is a shock for this generation.”
“8, so I am standing here. That is just a small example of how frightened people can be. Do I have SARS? I wish I did not have. Maybe I am mistaken. It is not really a fever. If I see the sinseh, he may give me some banlangen or some magic potion. Or take some garlic and vinegar and then all will be well. So, you have people who go from sinseh to sinseh and GP to GP, anything but confronting the truth, the awful possibility that maybe you do have SARS and need to go to Tan Tock Seng Hospital. And that psychological hurdle to, firstly, acknowledge that you may have SARS, and, secondly, if you do have SARS, to go to Tan Tock Seng Hospital before you infect your family. Each one of those is a very big psychological hurdle for people to take. So we have got to make it easy for people to make these steps. And it means explaining, showing them Tan Tock Seng Hospital. I hear all sorts of Hokkien meanings that have been attributed to Tan Tock Seng Hospital, but it is a perfectly safe place and we have to get people to understand that. If you have SARS, going in early is your best chance of coming out. You also have to help people to be willing to take proper measurements of their temperatures. And we have got to get people to watch out for each other - at work, in their families. So even if you are in denial, which is a natural human reaction, your spouse, your parents or your children would say, "No, I think you are sick. You better go." And they will badger you, harangue you and nag you until you go and see a doctor - not a sinseh, a doctor. Through this community support, we can hold together and overcome this problem. There is no medical cure for SARS.”
“The economic cost will continue to grow as long as the virus is on the loose but if it is contained, recovery should soon be coming. So, the best way to solve the economic problem is to concentrate the maximum possible resources on the medical problem and that is exactly what we are doing. Of course, a request will arise. I fully expected Mr Low Thia Khiang to ask about the GST. He would be remiss if he did not do so at every opportunity. But is that our problem? The GST increase is for the end of the year, something to be dealt with then. And I hold out no promises that that will change. Dr Wang Kai Yuen pointed out that this is a problem of human psychology. He is absolutely right. We are dealing with people. We are dealing with human beings. They are frightened. They are worried for themselves and for their children. They do not know how to react and they are looking for leadership and guidance. There is fear. There is denial. And as the Chinese and the Hongkongers point out, the fear of SARS is more damaging to the economy than SARS itself. Because when you fear, you stay at home, you do not go out, you do not spend, you do not do anything, and everything grinds to a halt. We have to overcome this, and understand that these are human problems. We are all afraid of getting sick. Nobody welcomes illness. Your fever goes up a little bit, you say, "Something has gone wrong. Better take the temperature again." We have been taking temperatures daily in MTI and MOF. The first day, I was 37.1. My PA said, "You are the champion." I thought that was bad news but I still passed. The next day, it was 37.3, stuck in the right ear. So I said, "No, no. Let's check my left ear." The left ear was lower. It is human psychology. You wish not to believe. Today, it went back down to 36.”
“So, if you help people stay in the tourism industry, even though hotel occupancy is 10-20%, what if the tourists do not come back for quite a long time? You cannot afford it. Supposing we give tax rebates. Will that solve the SARS problem? Will that get people spending again? As the editorial says, they are more likely to stash their money away to get them through the difficult times ahead. The editorial noted that various countries are looking at budget packages. Hong Kong announced a big package yesterday, which prompted this editorial. Singapore had a small package. So, at least, (according to the editorial) it could be said that Singapore has the wisdom to resist micro-managing the economy through this crisis and it is hanging back in order to allow the market mechanisms to work. In other words, we have to adjust. We do not know where, but we would have to see how the epidemic goes, what happens to the regional economy and the global economy, and then we adapt. To pour money out now does not solve the problem. It is premature. I think their conclusion is worth reading. They say: "Life is full of risks, and disease is one of them. When things go badly, especially all at once as with SARS, there is a natural temptation for government to step in. But that means that the next round of choices are distorted by the expectation that there will be a safety net. In a crisis which is ongoing like SARS, that changed perception could be particularly damaging. The true role of government is in protecting against dangers to society as a whole which the market isn't capable of addressing. SARS is just such a danger." To fight SARS, to get people quarantined, to change people's attitudes, to persuade them, is what the Government has to do.”
“So, what we can do to alleviate the hurt we will do it, but we cannot say that we will compensate everybody 100%, because that is not realistic. On economic assistance, this is an issue where, like Oliver Twist in the musical, he would ask, "Can I have more?" The question is: what is the solution to our problem? Will we solve our economic problem or SARS problem by having an economic stimulus package? Is it that kind of a problem? Is it because our wages are out of line, our market has disappeared, our costs are not competitive, or there is insufficient demand? So what happens if the Government spends $1-$3 billion? Well, we will all have a warm feeling - we buy each other's things, sell each other's things. But we do not solve the problem. The fundamental problem is a public health one. To get the economy going, you have got to get the medical, public health part solved. And that is not a question of money, but of the organisation, the social responsibility, the discipline and the commitment we put to it to fix the SARS problem and restore confidence. Then the economy can pick up again. The Asian Wall Street Journal coincidentally today has an editorial on this subject. The title is "SARS Bailouts are a Bad Idea" and the editorial explains why it is a bad idea. It says that if you have an earthquake or typhoon, you compensate everybody. They rebuild their shops and stores. Then you go back to business as usual again. But this is not an earthquake or typhoon. This is a change of the landscape. Will the businesses be the same at the end of this? What kind of businesses will come back? How should you adapt and move your people and your capital and your workers, and find new jobs? You do not know yet.”
“But, at the same time, where the Government's action directly impacts somebody - I shut your company, I put you out of work, I ask you to stay at home, or I close the company and, therefore, you also have to stay at home - we will provide assistance. If we do not do something to mitigate the pain, to help you out, then you are going to try your best to escape quarantine. And that is going to make our public health problem worse. So where we act and there is hurt, we will try to make good. I cannot always compensate fully, but I can extend some allowance or some gestures to address the hurt. In the case of the PPWC, we are going to waive rentals for 10 days and we are going to give them another ex-gratia payment of $1,600 per stall, more or less covering up the cost of the vegetables which became spoilt. Is it dollar-for-dollar? I think that is not possible, because this is a situation where there would be ups and downs, but to the extent that we can help, we will. So when it comes to the HQO allowance, if you are in the lower income group, I will give you up to 100%. In fact, if you are self-employed and a hawker, you may not earn $70, but I am going to gloss that over. I do not want to have to examine your income tax returns, your employer's records, or whatever the records there are, and audit them. What I have suggested to my staff to do is that when you are served with a HQO, you will be given a form. If you are an employee, give the form to your company. Your company will deal with the CDC and make a claim. If you are self-employed, you submit the form. We will process it quickly and if we can, we might be able to give you part of the allowance early and then the other part after you have completed your HQO, just in case you do not complete your HQO.”
“Mr Speaker, Sir, sorry to disappoint you with more answers. May I just focus on four or five main points which the other Ministers have not yet covered before Mr Wong Kan Seng tells us what he has been doing in the Ex-Co. Most of my issues have to do with our policy measures, our response and commitment of resources and effort to this task. Dr Lily Neo asked whether we have enough resources. We will have enough resources. Speaking as Minister for Finance, what is needed will be given. Do not waste it, but if you need it, it will be given. If you need drugs, masks, gowns, thermometers, treatment facilities, they shall be provided. We can afford it. This is the national priority. But it must be properly used and we must get the problem under control. Of course, there is never enough, and Members have asked for more. I would have been disappointed had they not asked for more. Mr Steve Chia asked why not go all the way to the limit, ie, do it like reservists' allowance or make-up pay - whatever your salary, make up 100%. We are not quite making up 100%, but we are not doing 50%, which is what Mr Steve Chia said. I think he may have misheard me. We are doing 100%, up to a cap. The cap is $70 a day. But, below that, whatever your pay is, you get it. And if you are self-employed, we will just give you a flat rate of $70 a day. We will give you the benefit of the doubt. What is our philosophy? I think we are in a situation where the economy is going to hurt, many Singaporeans are going to hurt, many businesses are going to hurt. The Government cannot take it upon itself to make good everybody's loss. Because from 4% growth we will go down to 1% or 0% growth. Where does the Government find $6 billion, which is equal to 4% of GDP, to make good? It is not possible.”
“Watching your temperature, keeping yourself healthy; sequestering yourself, if you are not - that takes more discipline. But with precautions and changes in habits which protect ourselves and especially other Singaporeans, we can continue to make a living, bring up our families, and maintain our social and community activities. SARS is a grave challenge. But we have an effective public service, a cohesive and cooperative population, and the resources to deal with the problem. We are mobilising all these to tackle SARS. I am confident that together we can overcome this problem, restore confidence, and get Singapore back to normal again. [Applause.] QUESTIONS ON THE MINISTERIAL STATEMENTS”
“Despite their heavy workload, the extreme stress, and the risk that they are exposed to daily, they have not compromised on their professionalism or their dedication to duty. We can all be proud that in such a difficult situation, these doctors, nurses and hospital attendants, who include non-Singaporeans, have shown the steadfast courage and commitment to do their best to overcome this national problem. They are an inspiration to all of us. The Courage Fund is a tangible way for Singaporeans to show their support for the healthcare workers. I am sure that all Members of this House will join me in adding our gratitude and support to the sentiments that have been expressed publicly by many Singaporeans over the last few weeks. But, more importantly, the healthcare workers need our cooperation, because whether their jobs become easier or harder in the coming weeks and months, depends on whether everyone is doing his part to contain the spread of the virus. Conclusion SARS will be a long-term problem for us. Now that it has spread to so many countries, scientists believe that it is not likely to be eradicated from the world. We have instituted effective measures to contain the outbreak in Singapore. As we discover more about the virus, we will modify and improve the arrangements to minimise the risk of infection. But every Singaporean must adopt sensible precautions and socially responsible habits, while carrying on with our normal day-to-day activities. We have to learn as one society to cope with the virus. Life will not be the same as it was before SARS. We must adjust our habits and behaviour patterns so as to tackle this new threat and adapt to the changed environment. Doing this [indicating] - Nemeste, instead of a handshake - that is easy.”
“But for these policies and measures to succeed, every Singaporean must play his or her part. To support the public health measures, all Singaporeans should follow the daily precautions recommended by the Ministry of Health to protect ourselves and those around us. We need to be keenly aware of our social responsibility to our families, friends and fellow citizens, in containing the spread of SARS. See a doctor if you are unwell, telling him the truth, and heeding his advice. Go to Tan Tock Seng Hospital if you suspect that you have contracted SARS, and abide by the Home Quarantine Orders if you are in quarantine. Do not travel to SARS-affected areas, unless you really cannot help it. Take personal responsibility to measure your own temperature and the temperatures of your family daily. To deal with the economic problem, we also need to work together. The tripartite partners have rallied to help affected companies stay viable and preserve as many jobs as possible. The NTUC, the Singapore National Employers Federation and the Ministry of Manpower have issued a joint statement recommending temporary cost reduction measures, including a shorter work week, layoffs and wage cuts. They have also acknowledged that, despite these measures, retrenchments will be unavoidable in the tourism and transport-related sectors, and advised employers to treat fairly workers who have to be retrenched. This realistic and constructive approach will help companies to stay afloat, and help as many workers as possible to keep their jobs. One group that is bearing the heaviest burden is our doctors and healthcare workers. They are on the frontline of the fight against SARS.”
“Compared to housing mortgage loans of $106 billion, households still own about $237 billion of net housing assets - a huge amount. If we include other household wealth, such as bank savings and shares, the total net wealth of households represents 670% of disposable income, which is comparable to OECD countries. Furthermore, most households service their housing loans through their CPF savings and contributions. So long as they keep their jobs, the impact is manageable. This is why the Ministry of Manpower (MOM) is trying its best to minimise job losses, through enhanced training grants, skills upgrading and other measures. Retail sector: Ms Olivia Lum asked about measures to help the retail sector. Domestic consumption has been affected as the initial fear of SARS has kept consumers away from all crowded places, including retail shops and restaurants. However, not all retail outlets are equally badly affected. And I believe, as confidence gradually returns, the restaurants will be filling up again. Those outlets in HDB estates fared better than those in the Central Business District which cater primarily to tourists. The property tax rebates are intended to help such establishments, and I strongly urge property owners to pass on the rebates to tenants. HDB itself will be doing so. These retail outlets can also send their workers for training and make use of the absentee payroll scheme for MOM and STB approved courses. Battlefront 3 - The Society The third battlefront against SARS is in our society, the way each Singaporean responds to the problem, and cooperates with the measures which will help us to solve it. This is the most critical battlefront. If we lose this front, we will lose all the other fronts, and lose the war. Government is doing everything possible.”
“All HDB commercial tenants are already enjoying a 20% rental rebate that lasts until 31st December this year. These include operators of student care centres, tuition centres, childcare centres and kindergartens. Some are also receiving additional rebate of up to 20% to bring their rents down to the prevailing market rent. In addition, HDB will pass on to its tenants the full savings from the recently announced property tax rebates. HDB will monitor the situation closely and will consider providing additional assistance to its commercial tenants, if necessary. Giro instalments for property tax: Mr Chiam See Tong asked whether property tax could be paid by instalments. The answer is yes. Taxpayers have been able to pay their annual property tax in 12 interest-free monthly instalments since 1989, provided they do it via GIRO. More than 50% of taxpayers are already taking advantage of GIRO to pay their property tax in monthly instalments, and the Government encourages more to do so. Indebtedness of Singaporean households: Madam Ho Geok Choo asked about the indebtedness of households. A study by the Department of Statistics showed that household financial liabilities have increased from 118% of personal disposable income in 1995 to 174% in 2000. If the economic downturn continues, it could lower disposable income and further increase the ratio of household financial liabilities to income. However, we have to view this ratio in perspective. First, 72% of the liabilities are in the form of housing loans. This reflects the high housing ownership in Singapore, which is 92% compared to 60% to 70% in the developed countries. Second, residential property assets, even after accounting for the weak property prices, stood at $343 billion in 2001.”
“In other words, if you are working for a company, then we will pay the HQO allowance to the company who is paying your salary. This will defray part of their manpower costs for the duration of the HQO. It will be especially helpful to smaller businesses, which may otherwise be unable to survive. For a small business establishment, in other words, one with fewer than 50 full-time workers, the assistance will be more generous. If the whole establishment is ordered to shut for a period on account of SARS, then the firm will receive this ex-gratia payment for all its employees, including those who are not on HQOs. Because the firm is closed, it has to carry its manpower costs; and we will help it to carry some of these. The cut-off of 50 full-time workers covers more than 90% of business establishments in Singapore. For self-employed persons, the allowance will be a flat rate of $70 per day, for the duration of the HQO. For employees, the allowance will be his daily salary, up to a maximum of $70 per day. The allowance will be paid to the employer. We will leave it to the employers to make their own financial arrangements with their employees. However, newly arrived work-pass holders who are required to undergo a 10-day quarantine will not be eligible for the HQO Allowance. This allowance will also be payable to all persons previously or currently already on home quarantine. Through the HQO Allowance Scheme, the Government will be bearing a good part of the wage cost of the businesses affected. MOF will provide full details of this scheme later on. Specific Issues Let me now address specific economic issues raised by the MPs in their questions. Rental rebates: Mr Gan Kim Yong asked about rental rebates for HDB commercial tenants.”